Tech Brew Ride Home - (Bonus) Inside Facebook with Steven Levy

Episode Date: March 7, 2020

I’ve said before, Steven Levy is the dean of the tech writers. All the way back in 1984 his classic book Hackers defined a tech space that wasn’t even fully aware of itself yet. Steven has written book length histories and examinations of Apple and Google, and now, with his new book, Facebook: The Inside Story, he finally tells the full Facebook story for the first time. Not the movie version, but the real story of how Facebook became Facebook from the earliest days at Harvard through the rise to 2 and a half billion users. It is, as I tell him, the best tech book I’ve read in years. If you want to fully understand Facebook, or just how a modern startup works or how a modern tech behemoth functions and sees itself in the world, I cannot recommend this book more highly. Buy the book here. Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the tech meme ride home. I'm Brian McCullough. I've said it before. Stephen Levy is the dean of tech writers all the way back in 1984. His classic book, Hackers, defined a tech space that wasn't even fully aware of itself yet. Stephen has written book-length histories and examinations of Apple and Google. And now, with his new book, Facebook, The Inside Story, he finally tells the full Facebook story for the first time. Not the movie version, the real-length. story of how Facebook became Facebook from the earliest days at Harvard through the rise to two and a half billion users. It is, as I tell him, the best tech book I've read in recent years.

If you want to fully understand Facebook or just how a modern startup works or how a modern tech behemoth functions and thinks of itself in the world, I cannot recommend this book more highly. Link to buy the book in the show notes. So I know that this is sort of writer inside baseball a bit to start out this way, but you got a lot of cooperation from Facebook people, like from Zuckerberg and Sandberg personally and lots of ex-Fa Facebook employees. I'm just curious, overall, the company, you had a good relationship with the company. They knew what you were doing, and there was no sort of like, well, you can't talk about this. You can't talk to that person or anything like that?

No. I was allowed to ask anything. People could refuse to answer a question a couple times they said, well, I want to get into that. But generally, they gave me their side of the story. There was no quid pro quo. I mean, I didn't show them the book in advance. There were no restrictions about what I could write about. And if there was something I didn't find out or, you know, just as a matter of course, everything that was told to me, I made sure was true. And I talked to people outside of Facebook and as you mentioned ex-employees and sometimes I would talk to people and have one kind of conversation inside the company and other outside the company. So it was all good. You know, the access was just nothing but a plus. If you're writing a book about a company,

you really want to know what the people at the company were thinking when they did this or when they did that or, you know, to learn about something they did. It was. It, wasn't public. And generally, the company itself feels like it is, they know that it's important to get the historical record out there in terms of their story as a company. Yeah, that was one pitch that I gave them. I said, look, you folks are doing something really, really important. There's a real big impact on society. That's why I want to write the book and part. And that even if it isn't me, you owe it to the world to let someone tell the story. You know, as someone who has written a book about tech history from this time period, I was

really fascinated and grateful for you finally laying out the real story of the early days of the company. Like, I feel like most people feel like they know the Facebook story because of the movie, but the reality of Facebook's early days is both more mundane and more amazing than what people saw in the movie. Yeah. Yeah, it's funny. I would go more amazing.

sort of my base premise of journalism is that the reality of what you find if your mind is open when you report is always, and like sometimes, always more interesting than any preconception you might have. And in this case, to be honest, I thought because there have been stuff written about Facebook's early days, I wouldn't spend that much time on it. But because of the trouble that Facebook ran into during the time I was researching the book over the last three years. I realized that this whole early Facebook and even the early life of Mark Zuckerberg had to be re-examined and that we could see signs of what led Facebook there was problems early on. And so I spent a considerable amount of time going over some

of those things, coming up with some stuff that hadn't been reported before or just looking at things with the benefit of hindsight that enabled me to set the foundation for the story of the company's growth and rise and the consequences that came of that. Yeah, and you lay it out chronologically in a really compelling way. Like, it's a really fast-paced read and really dramatic. But, well, like, for example, you lay this out, but, you know, in your mind, when do you think, you know, just to get into some of the details of the history that you talk about. What do you feel was the thing that made Zuckerberg realize he was onto something

that was really big as opposed to either just a lark or maybe a cool company that quit college for or whatever? What was the thing that you think the event or the time period when Zuckerberg was like, oh, this is huge? I think, you know, it wasn't one event. It was a cascade of events. So even though from the start, the Facebook, which is what it was called when Zuckerberg released it to Harvard in February of 2004, you know, it captivated the campus, took it over. And then he found that it worked on other campuses, even when there was a competitor living on the other campus. So that was an interesting sign that he actually, you know, tested this by the first place as he expanded. to were places where there was a competitor. He felt that, you know, let me go and topple someone over and see if this really works.

Even so, when he got to Silicon Valley that summer of 2004, a few months after he started, and they were, you know, on, you know, maybe double figures of campuses by them. He still had another project he was working on that he thought, well, maybe a work on this, and he would say to Sean Parker, you really think this is going to be big. But meanwhile, things kept falling in his left. He, you know, with his connection

to Parker, who you know, he almost gratuitously ran into in the streets of Palo Alto to renew an acquaintanceship from a meeting they had. A little earlier, he was ushered into, you know, the, you know,

office of Peter Thiel. You know, Reed Hoffman had already taken an interest in him, but Hoffman didn't want to be a lead investor because he had LinkedIn going, and he didn't want to have that conflict of, first and foremost. So then they get money. And then they're all of a sudden, they're this charmed company in Silicon Valley, moving too fast for him to go back to Harvard. So it probably wasn't really, I'd say, until the end of 2004, when they had a million users, that he really set along, yeah, this is like a big thing. And then over the next couple of years, he started thinking much bigger

and how he would take it from a college website to something that was going to be a worldwide force. What in your mind do you think, in Zuckerberg's mind, is the fundamental thing that he's doing with Facebook, that Facebook itself is doing? Well, he's just connecting the world. everyone on the same network and lighting up the social graph. And, you know, the social graph in his, the way he talks about it, is this existing nexus

of connections that people have. And you, it's funny. And as you map these connections, you know, they're not like lit until you're really connected online, though you might know someone. But he wants to light this whole, you know, complicated series, you know, of connections between this person, between that person and the number. the people you know and your relationship with the people your friends know, just light that up and be able to map it through one place, which is Facebook.

Right. And what I was going to say, you sort of still get that sense from the quotes from him in the book that still excites him. Like, you know, you hear people say, like, why is he still doing this? Facebook is one. Why does he still care? But I guess in his mind, you know, there's, like, what is it that they're still there for Facebook to do? It's that maybe, in his mind, that overarching idea still isn't complete yet? Once they fulfill that, and I think it's important for him to be the person that's doing it. I talk about his childhood when he was at school in high school. He loved games like civilization.

He was a fanboy of Augustus Caesar. So he's very much, you know, likes the idea besides the fact that I think he's He does believe it's a good thing for the world, but that he would be the person that conquers this, you know, the world by connecting it. So let's do get into some of the actual fun details that I hadn't heard before. I don't think I had a concept of this, but the like button was actually a very late addition for Facebook, like much later than the news feed. And that's kind of curious to me because.

I mean, reaction counts and things like that are so fundamental to how we understand the web and social media these days. And I mean, like, the dig button had already been around forever. Like, I was just so surprised that that was like, that was late. And in fact, it took them for a while to adopt it. Yeah, yeah. It wasn't that late. I mean, but it did come after the newspeep.

And it was a way originally proposed as a way to very quickly express your interest. in your approval of something you saw without writing a comment. And it took over a year for it to be implemented because there was some skepticism on Zuckerberg's part that maybe this will make people less likely to post the comment. So if, you know, they could just say like and leave it at that, they wouldn't say anything. But actually it was the opposite because they used like as a measure of engagement and would show you posts that are liked more than posts that don't have likes attached to them. More people saw it, more people commented on it.

But by then, they were thinking of the like button in a bigger way that it would be something not only that would be useful the way to express something, but a way to provide a piece of data about you. And it turned out to be much more powerful than they even suspected. when they started doing this. First of all, they spread it out throughout the web. It was the first thing, really, that took Facebook outside the borders of Facebook and, you know, extended its data gathering to millions and millions of websites,

which put the like button on there. And, but the second thing is that, you know, it told them so much about who you were. And a researcher, not at Facebook, who was, I think, at Cambridge University at the time, later went to Stanford, who figures into the story. in a couple ways. He figured out that, I think, with 15 likes, Facebook knew as much about you as a casual acquaintance. With 30 likes, they knew about you a friend. And with 300 likes, they knew as much about you as your spouse. One of the things that I think a lot of people outside of tech are unaware of is, like, the key

role of Chimath Palahapitia and his growth team. There was like a time in early 2008 when growth had basically plateaued, and then his growth, it's his growth team that made Facebook into the 2 billion-plus phenomenon that we now know today. That's right, yeah. He sort of accumulated a team, like, you know, kind of like the beginning of Mission Impossible where you throw those pictures out there, or almost like the dirty dozen, where they, you know, take these misfits and make them into a team. He wanted his team to be thought of as misfits.

Like, they were the people who do things that really pushed the edges of propriety. in generating growth, you know, doing things that you don't talk about outside of the growth group. And, you know, they lived in their own little grotto in the headquarters and got their way because Zuckerberg supported them all the way. So when the growth team was interested in something, you know, it got what it wanted. So they did all sorts of bicey tricks to goose growth. You know, they did a lot of, you know, in terms of, you know, soliciting memberships. They would scrape all your contacts and other things and, you know,

can send out Facebook invitations to people. And the other part of what they did, they recognized early on that a big part of growing Facebook was retaining new users. Because when you sign up for Facebook, before you build your network on it and get your friends, you know, who people you use. know to friend you, you're vulnerable because your newsfeed isn't that interesting. No one's posting things in your friend network. So they did things like they made up stories, maybe the first fake news, just so you have something

on your news feed. And they'd also use something that Chimoth referred to as dark profiles, which would come up earlier in the book. And Facebook has always said, these don't exist. but Chamas told me that they did exist and he would take out ads on Google and people's names who he thought might join Facebook. They hadn't joined. And if they search for their own name on Google, which everyone does, they would see an ad for themselves and saying, hey, you know, Joe Smith, you know, you don't check you, check out what we have on your Facebook.

And you click on it and you'd say, you know, you're just not on Facebook anyway. Why don't you just finish it up and sign up? And then they would bombard you with a feature called People You May Know, which we could talk about, to immediately get you to some friends, and connected with the people you knew already on Facebook, and then you were in. Another thing that I forgot that your book reminded me of is that essentially, from Facebook's perspective, it was always like a series of threats coming from these out. It starts with Twitter, where Twitter gets very popular, very fast, and it's fundamentally doing

social media in a way that's fundamentally different than how Facebook was doing it. And then, you know, Instagram and Snapchat on and on and on. It's like one of the things that they always seemingly understood was, you know, people had said as a knock on social media all the time that it was faddish, that is something that worked would only work for a few years and then the next new hot thing. And so they were always really nimble about being aware of what the next new hot thing is and adapting with it. Yeah, they were. And then, you know, sometime, you know, early in the 2010s, they became very methodical about that,

about noticing what rose to the top. And they bought a company, an Israeli company called Anavo, which essentially was a company whose business model was somewhat of a deception, that they would offer like tools for mobile that people would sign up for, but buried in the terms of service was the idea that it would be sucking up their data. So by using that tool, Facebook was able to recognize early on what apps were getting a lot of traction. So they noticed that most famously about WhatsApp that before people realized it and people in the U.S. weren't generally weren't aware of this because WhatsApp is so international. They thought, well, here's a company that's like having tremendous growth, and this will be a threat to us.

So Zuckerberg, you know, instituted what I call the playbook, which was, you know, a series of, you know, prongs and his, you know, courtship of a company, you know, meant to break their will and have them sell the company to Facebook. Well, another example of that being the Instagram acquisition, which I had forgotten, too, that Twitter actually had sort of the inside track on that, and it's just that Zuckerberg was not going to let Instagram get away. Oh, he had a playbook in Twitter, didn't. That's the bottom line. And the playbook is, get personally involved, you know, bring them to your house, you know, can basically just bombard them and don't leave, really, until they're, you know, on board. And he would promise them independence. He'd say, hey, you could keep doing what you're doing, and we're just going to give you more and more resources to help you do it faster. And then he'd throw enough money at them that their investors would murder them if they turned it down.

It's not said explicitly, but kind of reading between the lines, there's a couple times in the book where the suggestion is that Zuckerberg sort of resents on some level Instagram success. Like, also reading between the lines, it seems like he kind of pushed out the Instagram. founders and also the WhatsApp founders or whatever. Do you get that sense, too, that he's sort of not in any like... Yeah. Yeah, go ahead. I don't think you have to read too deeply between lines to make those conclusions. You know, I didn't, you know, I didn't maybe say it in those words, but, you know, what

I do, and this is sort of my approach to how I do these things in general, is that I give you, tell me the story, and you're able to come to that conclusion just in the same way I would, but I don't have to circle it in red crayon. And I say explicitly in this case, the people on the Instagram team believed the Zuckerberg was, you know, forcing them out, starving them of resources and was jealous of the success of Instagram. And I point out a few times when, you know, he says almost offensively, like you're saying, yeah, they're, you know, successes, you know, because we gave them the resources. And when he told me that, something to that effect, too, I asked them directly. because I've been hearing that this is, you know, the feeling among the Instagram team that he was jealous of Instagram success,

which is kind of weird because, yeah, he couldn't take credit for it in a sense. He did give him the resources. He was smart enough to identify that this was a great company to buy. His billion dollar, you know, amount that he gave to buy the company was an unbelievable deal. And but when I asked him about it, I said, well, are you jealous? of Instagram. You know, our relationship got to the point where I'd be asking him these direct questions

like left and right. And, you know, he like paused for a long time and gave an answer which, you know, though, so it was somewhat evasive, but didn't really clear up the question about whether he was jealous or not. It was clear that he was uncomfortable with trying to answer that question.

One other impression that I came away from. You know, as you said, the book is a lot of tracing the decisions that got Facebook to where it is, and also decisions that maybe got it into trouble. Cheryl Sandberg's hire the way Sandberg and Zuckerberg divvied up duties, and essentially it was Cheryl would take over all of the parts of running Facebook as a business that Zuck didn't care about, and how, you know, you've got to figure that inside the company you can understand, well, I want to be working on the stuff that Zuck cares about, and this other stuff maybe isn't that important, and that might have led to a lot of their problems.

Right. I don't think the people who are working in Cheryl World, as I call it, felt they weren't doing important work. But effectively, you know, a lot of the problems that were bubbling up in that world, you know, just didn't get to Zuckerberg and the lieutenants around him to really set the priorities for the company. So that particularly came out, you know, when you trace back why all these, you know, things happened during the election, how Facebook was allowed, you know, made the decision to let fake news keep proliferating. I think that really could have benefited, you know, from more attention, you know, from Zuckerberg, and his team.

It did come before them at some point, but it was really, you know, in the domain of Cheryl world. And with, in terms of the Russian involvement, security, the chief security officer,

Alex Stamos, reported up the chain to Cheryl. I mean, he has a city in his name, and he had, and he reported to the chief counsel, reported to the chief policy,

to the head policy person, who reported to Cheryl, and then, you know, forget getting up the mark. You know, Stainworth's never had a one-on-one with Mark Zuckerberg. Right. That's amazing.

Yeah. I didn't know that, yeah. Which is crazy. Yeah. Do you think that Sandberg, I get the sense that she would have left Facebook by now had all of the scandals and stuff not happened. Do you think that she doesn't have much time left at Facebook? Well, I mean, that was, my conclusion was, you know, I ran this theory by her. then, you know, and she told me that I thought I'd give Facebook five years.

And I said, well, you know, my guess is, Cheryl, that, you know, you wanted to leave after the IPO, but the IPO was a disaster. And it took a few years for Facebook to recover from then. You want to leave on a high. And then after that, you know, tragically, her husband died. He was a fantastic guy. And that definitely threw her off her game quite understandably for, for, months, really. And then, you know, and I told her, I think, you know, maybe you would have run for

Senator at that point, you know, but other people told me Kamala Harris had in the bag. But, and then, you know, Facebook runs these other problems. Not so easy to leave in the middle of this crisis. And she told me, well, you know, first of all, you know, and she, I think she quite justifiably said, you know, my husband's buying it totally. different kind of category of issue there. But, you know, I don't want to run for office, she told me, which is sort of counter what everyone thinks about Cheryl. But she did say that if Clinton had won, she would have welcomed an opportunity to serve in that administration. Meanwhile, you know, I personally, you know, I don't say this in the book. The book is not for me

to make judgments, and it's for me to tell the story. And maybe people reading the book and come to that conclusion is I would be surprised. if Cheryl, you know, found another opportunity for herself in the next year or so. I think that, you know, she's done a lot for Facebook. You know, I do take her to task for a couple things, you know, rising from the way the company was split in hell. You know, she didn't elevate these things to Zuckerberg and, you know, certainly, you know, didn't handle them well in their own.

It was, you know, I think that Facebook is going to be in trouble for the foreseeable future. So, you know, she's got a new domestic situation. You know, she's engaged. And I wouldn't be surprised. And this is just, you know, me talking, you know, as a guest. I wouldn't want to make it in the book. But, you know, she's an incredibly talented person. She might feel that she could do better.

by doing something else. And as far as Zuckerberg, I heard you say, I think, that the two words you've never heard at Facebook are succession plan. Yeah, that's right. Yeah, I don't think, you know, he is going anywhere. If the board of directors, for some reason, wanted to say, you know, we've had enough Zuck, he could always say, well, I have the voting stock, you know, try to get me out of here. But the people he puts on the board, and he has a lot of say on it, are generally supporters.

Peter Thiel, I don't think it's going to say, you know, no more Zuck. They just appointed Drew Houston to the board. You know, Drew Houston didn't come on the board to Thorelt Mark Zuckerberg. So I don't think that's a worry. The final question, I'm going to straight up steal from Casey Newton, because he noted that, you know, you've done book-length, into Apple and Google as well. How does Facebook's internal culture compare to other tech companies? I've always noted that over the years that every company has a different culture,

but the people at Facebook are definitely, definitely different than other companies. Yeah, yeah, and it's very much in Zuckerberg's image. He is in a business person. He's a person who wants to get things out there in a hurry. You know, only recently have they, you know, made the statement saying, well, from here on in, we're going to actually try to figure out what the consequences are of things we do, you know, which one would hope that people do that from day one. But, you know, but now they say, we're, you know, they didn't exactly say we have no realization of that before, but we're going to think more about that. And that's, you know, and it's also more of a, I wouldn't say like a literal cult of personality, but more of something where people wind up channeling their leader. And even though that, you know,

a company of Facebook size is over 30,000 people, you know, most people will have never met Mark Zuckerberg. And, you know, you'd be surprised that the chief security officer didn't sit down with them one by one. But you can imagine the rank and file Facebook worker, it doesn't spend time with Mark Zuckerberg. But many times I would hear people refer to something that this is what Mark thinks. You know, Mark wants us to do X and Y. So in that sense, it is something where he is, you know, the person whose voice winds up in their head. And that's a little different, you know, even though, you'd say like Larry Page, you know, was a strong, you know, influence on the Google culture, you didn't hear that then.

And, you know, even though Steve Jobs, obviously, fantastic, you know, unparalleled talent in Silicon Valley, it's like people weren't encouraged to think like Steve Jobs necessarily. Only Steve Jobs could think like Steve Jobs. So it is something like that. You go to the walls of headquarters or plaster of these posters that are basically things that, you know, or either Zuckerberg said or things that you'd think you'd say, move fast and break things, and what would you do if you're not afraid? And so that message just gets pounded on you.

Well, as I mentioned in the intro, the book is Facebook, The Inside Story by Stephen Levy. Stephen, by the way, I read all of these books. This is the best tech book that I've read in several years. It was so fantastic and well-written. Well, thank you. you. I encourage you to post a review on Amazon. We'll do. Thank you, Stephen.